Education Expenses

Education Expenses

What You May Deduct
You may deduct the cost of "ordinary and necessary" expenses paid for employee education and training. You may also deduct the cost of education for the business owners if you can show that it "maintains or improves skills required in your trade or business," or that it is required by law or regulations for maintaining a license to practice, status, or job. For example, professionals can deduct costs for continuing education.

Education expenses you incur to meet the minimum requirements of your present trade or business, or those that qualify you for a new trade or business, are not deductible. This is true even if the education maintains or improves skills presently required in your business. For more information on education expenses, see IRS Publication 970. Deductible educational expenses include books, tuition, travel costs to and from school.

What You May Not Deduct
You may not deduct costs for education expenses "to meet the minimum requirements of your present trade or business." For example, you cannot deduct the cost of obtaining a license to practice if you don't already hold such a license.

Where to Show these Expenses

• For sole proprietors and single-member LLCs, show these expenses in the "Expenses" section of Schedule C
  
• For partnerships and multiple-member LLCs, show these expenses in the "Deductions" section of Form 1065
  
• For corporations, show these expenses in the "Deductions" section of Form 1120.

Disclaimer
This article presents general information; I am not a tax attorney or tax preparation specialist. Refer to IRS publications and refer questions to your tax consultant.